15 October 2021

70% vaccination and going strong! But can a landlord require a tenant to be vaccinated?

In this ever-evolving COVID-19 world, it is a race against time to define the “new normal”, and the property industry is no exception.

Recently, a landlord client approached us and asked whether it could require its tenants (including the tenant’s staff and visitors) in a commercial office building to be vaccinated against COVID-19, so that the building could be labelled a “COVID-19 safe” building.

Great question! However, there is no clear-cut answer at the moment and there are several issues to consider including a tenant’s right to quiet enjoyment, vaccine passports and public health orders. But ultimately, this will be a question for parliament, and failing that, the courts.

Public health orders and the Government’s approach

The Government has made its intentions regarding COVID-19 vaccinations clear. That is, it will not be mandatory to get vaccinated against COVID-19, but you can only work in certain industries and enjoy certain freedoms if you have been so vaccinated.

The Premier stated that “at 70%, if you’re not vaccinated, it will be a health order and the law that if you’re not vaccinated, you can’t attend venues on the roadmap… you can’t go into a hospitality venue. You can’t go to ticketed events unless you are vaccinated. We made that very clear.”

So, even if a landlord itself may not be entitled to mandate COVID-19 vaccinations for its tenants, it is likely that the public health orders will do so in some way, shape or form. Certain venues will remain closed or operate under restrictions until vaccination targets are met, there are a growing number of freedoms that may only be enjoyed by the fully vaccinated, and the list of employees for which vaccination is mandatory is expanding. If tenants and their employees and customers want to take advantage of easing restrictions – they are going to have to play ball.

Terms of the lease

In the first instance, we need to look to the terms of the lease when considering whether a landlord can impose an obligation on its tenant to get vaccinated. Given that the pandemic is the first of its kind in our lifetime, it is extremely unlikely that any lease would contain provisions that specifically address this question.

Comply with all laws

Most leases would contain a provision that requires the tenant to comply with all laws and the requirements of all government agencies in relation to the premises and the tenant’s use of and operations at the premises (including complying with work health and safety laws).

Therefore, if a tenant were to operate in breach of a public health order or other law which requires tenants, employees or their visitors to be vaccinated, then the tenant would also be in breach of its lease. The landlord could rely on the ’comply with all laws’ clause to issue a breach notice and require rectification of that breach within a reasonable time. If the tenant does not do so, the landlord may terminate the lease.

However, termination of the lease is not always the ideal result, particularly in the current market.

Conversely, it would be very difficult for a tenant to claim an abatement of rent or seek to terminate its lease if it is unable to trade or carry out the permitted use because it has chosen not to mandate vaccinations for its staff and visitors pursuant to applicable public health orders or other laws. Therefore, a landlord may be left with a tenant which cannot trade, and a tenant which has no recourse under the lease.

Right to quiet enjoyment

It is an implied term of every lease that a tenant is entitled to quiet enjoyment, that is, the tenant has the right to use and occupy the premises without substantial or unreasonable interference by the landlord.

This right is subject to the terms of the lease and any rights expressly reserved by the landlord, which could include the right to close premises in an emergency or in accordance with a law.

It is possible that a court might consider a landlord’s requirement for mandatory COVID-19 vaccinations to be a breach of the tenant’s right to quiet enjoyment, especially in circumstances where vaccination is not required by law for the tenant’s particular use of the premises, but this issue is yet to come before the courts.

Landlords must be aware of and observe their work health and safety obligations and their obligation to provide a safe space for visitors to their premises (particularly, for example, while visitors are using common areas of a centre or building). This might be a valid (reasonable) ground for interfering with a tenant’s right to quiet enjoyment.

Specific Lease Clause

If it felt so strongly about the issue, going forward a landlord could include a carefully considered clause as part of its standard lease document which requires tenants to use reasonable endeavours to ensure that its employees and visitors are vaccinated, and the effect of failing to do so (other than termination for breach of the “comply with all laws” clause).

We are already seeing that such “pandemic” clauses are common in most legal deeds or contracts in the post COVID-19 world, to provide a mechanism for dealing with the spread of infection, possible lockdowns, and the inability of the parties to carry out their obligations because of these issues.

Mandatory vaccinations in the workplace

You can read our take on mandatory vaccinations in the workplace here: No jab, no job, no problem? Not quite.

You will see that it is not a clear-cut answer as to whether an employer can require an employee to be vaccinated against COVID-19 unless it has been mandated under a public health order, and each case will turn on its own facts.

The relationship between an employer and employee is different to the relationship that a landlord has with its tenant – but there are overarching and similar responsibilities under the Work Health and Safety Act 2011 imposed on persons conducting a business or undertaking – including in respect of owners of premises.

Anti-discrimination laws

While some may argue that excluding someone for their vaccination status (including by a landlord requiring its tenants and the tenant’s staff and visitors to be vaccinated) is unlawful discriminatory behaviour, the public health orders issued by the NSW Government were recently upheld by the Supreme Court in response to a challenge on grounds including breach of the Disability Discrimination Act 1992 (Cth). See Kassam v Hazzard; Henry v Hazzard [2021] NSWSC 1320

s 47(2) of the Disability Discrimination Act excludes the operation of the Act’s prohibitions for “anything done by a person in direct compliance with a prescribed law” which includes a State law (s 47(5)).

There is also an exception from the Act’s operation for persons whose disability is an infectious disease and the discrimination is reasonably necessary to protect public health (s 48).

Section 49P of the Anti-Discrimination Act 1977 (NSW) has a similar exception.

Privacy laws

Another objection that might be raised by a tenant to a requirement by the landlord that a tenant must prove that the tenant and the tenant’s employees are vaccinated is that it breaches privacy laws.

However, employee records are effectively excluded from the operation of the Privacy Act 1988 (Cth), and a tenant/employer can collect vaccination status information from its employees if the information is reasonably necessary for the tenant/employer to carry out its functions or activities. This will be the case if it is necessary for the tenant/employer to fulfill its work health and safety obligations.

Conclusion

In short, it’s a bit of a minefield at the moment! It would be tricky from a legal point of view for a landlord to require tenants (and their employees and visitors) to be vaccinated in the absence of a clause in the lease mandating vaccinations, and where public health orders or other laws do not also require vaccination. However, we anticipate the situation will change as more people become vaccinated, the government’s policies evolve and cases begin to wash through the courts.

Authors: Kristie Carlile and Julia Yassa

Contributing partner: David Creais